Justices begin their scrutiny of health care law

Court to spend Tuesday looking at heart of dispute over Affordable Care Act

By Dan Freedman

Published 10:34 pm, Monday, March 26, 2012

WASHINGTON — The Supreme Court's examination of the health care law will focus on the hard constitutional questions Tuesday after a lead-off day spent on whether an obscure 1867 tax law delays a decision until 2015.

For the most part, the justices appeared content to cite several past Supreme Court precedents that provided exceptions to the 1867 law and leave it at that.

Justice Antonin Scalia, the court's long-time conservative champion, said that in cases when such issues are not clear, "courts are not deprived of jurisdiction," meaning the 1867 tax law should not short-circuit a ruling on health care.

"I find it hard to think that this is clear," Scalia said. "Whatever else it is, it's easy to think that it's not clear."

On Tuesday, the second day of a three-day oral argument marathon, the nine justices will look at the guts of the dispute over the Affordable Care Act, or "Obamacare," as its detractors call it: Did Congress overstep constitutional limits when mandating that everyone (with few exceptions) have health insurance?

The Constitution grants Congress the power to regulate interstate commerce, as well as pass taxing-and-spending provisions.

The Obama administration's top lawyer before the Supreme Court, Solicitor General Donald Verrilli, will argue that the mandate easily falls within the Constitution's limits because health care for those who lack health insurance ultimately is paid for by taxpayers in general and those who do have health insurance.

Hospitals recoup losses for uncompensated care through a government funding mechanism and by charging higher rates to insurance companies, which in turn pass them on to policyholders nationwide.

Paul Clement, solicitor general under President George W. Bush and who represents 26 states in a lawsuit against the health care law, will counter that never before has the government regulated "inactivity" — a decision not to buy health insurance, in this case.

One district court judge in Florida who struck the law down wrote that if the government can force individuals to purchase health insurance, it can dictate that they buy and consume broccoli.

The justices on Monday appeared so uninterested in the tax question that they had time left over for the question they'll take up on Day Three: whether the health care law's expansion of Medicaid to help the uninsured amounts to unconstitutional coercion of the states.

The Civil War-era law at issue Monday bars lawsuits against taxes until they are actually levied. The health care law's mandate says that individuals who do not have health insurance must pay what the law terms a penalty.

Since the penalty is administered by the Internal Revenue Service as part of the tax code, it operates as a tax and is therefore subject to the 1867 law, said Washington lawyer Robert Long.

Since neither the Obama administration nor the 26 states contesting the law wants to see the high court's decision delayed, the justices took the extraordinary step of hiring Long to argue the case.

Two separate federal appeals courts ruled the Anti-Injunction Act does not apply, but a third appeals court in Richmond, Va., said it does.

On Monday, most of the justices appeared eager to find a way around the tax-law roadblock. "Congress has nowhere used the word 'tax'" in the law's section on the health insurance mandate, said Justice Stephen Breyer. "What it says is 'penalty.' So why is this a tax?"

By contrast, the issue Tuesday is whether the Constitution's language permitting Congress to impose taxes is broad enough to cover the penalty that Congress assessed for anyone not buying health insurance.